New Delhi, Feb 28 (KNN) Jailtey’s budget announcements have left the MSMEs a tad disappointed.

Though the budget announced setting up of a ‘Micro Units Development Refinance Agency (MUDRA) Bank,  with a corpus of Rupees 20,000 crore and a credit guarantee corpus of Rupees 3,000 crore, it will be used for re-financing of  Micro Financing Institutions (MFIs).

‘Micro-finance is an extremely important segment, but it is totally different from MSMEs’, says Gandhikumar, President of Federation of Indian Micro and Small & Medium Enterprises (FISME).     

‘MFIs typically fund self-help groups of small borrowers for financing consumption loans or for buying productive assets such as cows, buffaloes etc while MSMEs are into manufacturing or services in defined categories’ he said.  

FISME President welcomed the announcement of setting up of an electronic Trade Receivables Discounting System (TReDS) financing of trade receivables of MSMEs, from corporate and other buyers, through multiple financiers. 

‘Delay in receivables is one of the biggest problems MSMEs face and we expected a real action on Factoring or some initiative to ensure timely payment’,  Gandhikumar added.
He also welcomed proposal to establish SETU (Self-Employment and Talent Utilisation)- a Techno-Financial, Incubation and Facilitation Programme with a corpus of Rupees 1000 crore. This is to support start-ups and other self-employment activities particularly in technology-driven areas. The fund is proposed to be managed by in NITI Aayog. 

The budget fell short of expectation for MSMEs as it is silent on the contentious issues such as disallowing loans from friends and relatives in Companies Act or the MSMEs’ demand of lowering of investment allowance- issues that bothered MSMEs the most.  (KNN/AB)